An Economic Update with Jill on Money

CBS News Business Analyst and host of Jill on Money joins us to discuss an update on the economy and how the last 5 years have been tough for economists. 

Episode Transcript

Speaker 1 (00:00):
And this is West Michigan's Morning News. Steve Kelly, that's
bread keta. Let's talk about the economy. Things will look
a little better on your four to oh one K.
But why are so many Americans feeling left behind? This
is West Michigan's Morning News, Steve Kelly and Brad Pakita
just said that. Back with us this morning after a

(00:20):
tiny time off. Jill Just's lessen your CBS News business
analyst host of Jill on Money. Good day to you.

Speaker 2 (00:26):
Good day sir.

Speaker 1 (00:27):
So what's going on? And we got to talk about
a little FED meeting this week and what that could
mean moving forward. So what's going on?

Speaker 2 (00:34):
Well, I think if you sort of look at the
economy from ten thousand feet up, what you see is, hey,
we're growing. The tariffs have maybe created some uncertainty, but
because a lot of the stack tariffs didn't stick and
the companies will kind of were front running those tariffs
and buying stuff, and there's a lot of spending on
AI and you look at the amount of spending overall

(00:57):
that's being done, you would say, hey, things are actually okay, right. Unfortunately,
that's not what we're hearing from Americans. What they're saying
is I don't feel so good about the economy, and
they're not feeling good. Not everyone, but we're starting to
see a bifurcation. We're starting to see some people it's

(01:18):
feeling like things are going well and others saying they
feel really bad. And so think of the letter K, right,
and you look at the top arm, you know, draw
line down and then you've got an arm that goes up.
What is that top arm that represents parts of the
economy and people that are doing well. So maybe big
sectors like technology with the AI exposure and high earners

(01:40):
where people in who have high amounts of wealth, they
own homes, investments, they're feeling pretty good, right, and they
feel really good because their stocks are up, they feel
really good because their home prices have their home values
have increased. All of that is all good for them.
But then you look at the arm down of the K,
and that really represents the individuals who make less than

(02:02):
one hundred and seventy five thousand dollars a year households
and the sectors that rely on them. And those folks
are kind of worried about the labor market and they
are saying, hey, prices are still high. And you know,
what I would point to is not so much the tariffs,
but things like childcare, elder care, healthcare, housing, the cost

(02:25):
of an automobile. All of those things together mean that
there are people who say they feel really rotten about
the economy. I mean, it hasn't. It's so strange to
me that people have a worse view of the economy
now than in mid twenty twenty two, like just sort
of still in the pandemic and inflation was at nine percent.
I think it's just the accumulative effect of these high prices.

Speaker 1 (02:46):
To that point, I feel stupid asking again about interest
rates and what that might mean in the difference between
a fifty and one hundred dollars gift card. Is a
gift for Christmas? Right?

Speaker 2 (02:56):
I mean, yes, yeah, I mean that is so true.
I mean, so, we have a FED meeting. It's starting tomorrow,
it will conclude on Wednesday. I think that most economists
believe the Fed's going to cut interest rates again by
another quarter of a percentage point, and that will bring
us to three and a half to three point seventy
five percent in the FED funds, right, the lowest range
in about three years. Now. This is not zero percent

(03:19):
interest rates, which is where we were when COVID was
really devastating the economy. But what it means is it
becomes a little bit easier to finance things. But to
your point, it doesn't really make a huge difference. If
your credit card interest rate, you're carrying a balance on
your card and it goes from twenty two percent to
twenty one and a half, you know you're not going

(03:40):
to feel like, Whooo, I'm feeling great and I feel flush.
So what really has to happen is people have to
feel better about the labor market. They have to feel
like their wages are catching up to high prices, and
they have to feel like there's opportunity for them to
get into the areas that are growing, meaning they have
to feel like I can buy a house eventually, or
they to feel like, yes, I have the money in

(04:02):
my four oh one k it's not just twenty five
years out. I'm seeing I'm able to put more money in.
The numbers are getting bigger. Those are the things that
start to make you feel better about with the economy.
But again, this is a very strange time. I don't
want to make it seem like everything's honky dory. The
last five years for economists have been head scratchers. You know,
once in a generation, once in a century, pandemic that

(04:25):
hits through an economy has reverberations, and I still think
we're feeling part of that.

Speaker 1 (04:31):
CBS News Business analyst and host Jill on Money Jill's Lessinger,
Thank you, Thank you,